Biotech’s legacy lives on locally

Pacira says it has spent $100 million on the DepoFoam manufacturing process.

The DepoFoam process has been used at the San Diego plant since it was owned by DepoTech, and some of the plant’s employees go back to that time, Kaczmarek said. That expertise and experience can’t be duplicated elsewhere.

Moving the manufacturing would be disruptive, said Richard Lau, a Wedbush Morgan analyst who covers Pacira.

“The manufacturing process is relatively complex, and so I don’t think it would be that easy to just up and move it,” Lau said.

Pacira got the plant after SkyePharma sold it in 2007 for $82 million to a group of venture capital investors, who then set up Pacira as an independent company. SkyePharma couldn’t make the DepoTech operation profitable, and Pacira is also losing money. The company lost $23.1 million, or 71 cents per share, in the quarter ended March 31.

In the same quarter a year earlier, Pacira lost $11.9 million, or 7 cents per share.

However, investors appear to think Pacira can succeed where DepoTech and SkyePharma failed. On Tuesday, Pacira shares closed at $28.84, near Pacira’s 52-week high of $30.94. Pacira shares closed at $10.50 on May 22, 2012. As of Tuesday, Pacira’s market value was about $950 million.

“We’ve been commercially viable for a year,” Kaczmarek said.

Pacira is in preclinical development of two other drugs with the DepoFoam technology, DepoMethotrexate, for rheumatoid arthritis and cancer; and DepoNSAID, for acute pain.